Coinbase Flips the Script: Declines $20M Extortion Demand, Offers Bounty to Hunt Hackers Instead

Blackmailers picked the wrong crypto giant to mess with. Coinbase just turned the tables on hackers demanding $20 million—by launching a matching bounty program to track them down.

No negotiation, no payoff—just a middle finger wrapped in blockchain irony. The exchange’s countermove exposes the growing ’pay-up-or-else’ epidemic plaguing crypto firms, where security budgets now rival small nations’ GDPs.

Bonus jab: Wall Street bankers watching this unfold just choked on their $500 scotch—extortion is their department, not Silicon Valley’s.

How Coinbase attackers gained customer info

According to Coinbase’s internal investigation, the attackers obtained customer data by targeting Coinbase’s overseas customer support representatives. They bribed some of these reps in exchange for sensitive user information.

These representatives don’t have access to private keys or passwords. However, the information they had, such as dates of birth and contact information, allowed the attackers to perform social engineering attacks. Specifically, they contacted the users, pretending they were support agents, and tricking them out of their crypto.

Armstrong stated that Coinbase would reimburse any customers who lost crypto in this manner. The company is also relocating some of its customer support centers in response, although Armstrong did not disclose which locations would be affected.